Cost Accounting

Solution Manual

Book Title: 

Cost accounting 13th

Author(s): 

Horngren, Foster, Datar, Rajan & Ittner

Publisher: 

Prentice Hall

Chapter: 

1-23

Description: 

<p>password: http://dlecture.com</p>

1. The Accountant's Role in the Organization
2. An Introduction to Cost Terms and Purposes
3. Cost-Volume Profit Analysis
4. Job Costing
5. Activity-Based Costing and Activity-Based Management
6. Master Budget and Responsibility Accounting
7. Flexible Budgets, Direct-Cost Variances, and Management Control
8. Flexible Budgets, Overhead-Cost Variances, and Management Control
9. Inventory Costing and Capacity Analysis
10. Determining How Costs Behave
11. Decision-Making and Relevant Information
12. Pricing Decisions and Cost Management
13. Strategy, Balanced Scorecard, and Strategic Profitability Analysis
14. Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis
15. Allocation of Support Department Costs, Common Costs and Revenues
16. Cost Allocation: Joint Products and Byproducts
17. Process Costing
18. Spoilage Rework, and Scrap
19. Balanced Scorecard: Quality, Time, and the Theory of Constraints
20. Inventory Management, Just-in-Time, and Simplified Costing Methods
21. Capital Budgeting and Cost Analysis
22. Management Control Systems, Transfer Pricing, and Multinational Considerations
23. Performance Measurement, Compensation, and Multinational Considerations

CHAPTER 1

THE ACCOUNTANT’S ROLE IN THE ORGANIZATION

1. Management accounting measures, analyzes and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization. It focuseson internal reporting and is not restricted by generally accepted accounting principles (GAAP).
   Financial accounting focuses on reporting to external parties such as investors, government agencies, and banks. It measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP).
   Other differences include (1) management accounting emphasizes the future (not the past), and (2) management accounting influences the behavior of managers and other employees (rather than primarily reporting economic events).

2. Financial accounting is constrained by generally accepted accounting principles. Management accounting is not restricted to these principles. The result is that

• management accounting allows managers to charge interest on owners’ capital to help judge a division’s performance, even though such a charge is not allowed under GAAP,
• management accounting can include assets or liabilities (such as “brand names” developed internally) not recognized under GAAP, and
• management accounting can use asset or liability measurement rules (such as present values or resale prices) not permitted under GAAP.

3. Management accountants can help to formulate strategy by providing information about the sources of competitive advantage—for example, the cost, productivity, or efficiency advantage of their company relative to competitors or the premium prices a company can charge relative to the costs of adding features that make its products or services distinctive.
    
4. The business functions in the value chain are

• Research and development — generating and experimenting with ideas related to new products, services, or processes.
• Design of products, services, and processes — the detailed planning and engineering of products, services, or processes.
• Production — acquiring, coordinating, and assembling resources to produce a product or deliver a service.
• Marketing — promoting and selling products or services to customers or prospective customers.
• Distribution — delivering products or services to customers.
• Customer service — providing after-sale support to customers.

5. Supply chain describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in the same organization or in other organizations.

   Cost management is most effective when it integrates and coordinates activities across all companies in the supply chain as well as across each business function in an individual company’s value chain. Attempts are made to restructure all cost areas to be more cost-effective.